Minister takes stand to defend taxi owners’ president in suit brought by company offering cab-hailing app

The minister of transports took the witness stand on Thursday to defend the president of Greece’s taxi owners association in a defamation lawsuit brought against him by an Athens-based company that markets a successful cab-hailing app – a development that earned the ire of the unionists and the suspicion on the part of the leftist-rightist coalition government.

Transports Minister Christos Spirtzis referred to “anonymous reports” six months before a draft bill was passed by his government to restrict ride-sharing and cab-hailing apps in the country. He said the allegations claimed that taxi drivers were receiving wire transfers from abroad for fares conducted in the country, mostly in the greater Athens area.

The Taxibeat company, which has been purchased by Daimler’s MyTaxi subsidiary, brought a defamation suit against Thymios Lymberopoulos, the president of the taxi owners association, seeking 260,000 euros in damages.

The latter had claimed that the company was engaging in tax evasion through its app, that it has no legal standing in Greece and is also violating regulations in Greece’s “closed shop” taxi cab sector.

Among others, Spirtzis said Lymberopoulos, as the head of a nationwide association, “has a duty to defend the sector on an institutional framework.”

In diametrically opposing testimony, Taxibeat’s CFO said press reports claiming the company was tax evading or funneling revenue to “tax havens” abroad were baseless. She also said Taxibeat was regularly audited by tax authorities, whereas no corporate taxes have been paid because the initial start-up has so far posted damages in annual results.

Taxibeat executives have charged that Lymberopoulos’ statements were false and harmed the company’s reputation, with the hiring of consultants and extra advertizing expenditures to offset the damage costing 270,000 euros.

“He (Lymberopoulos) is following out-dating (business) models… he’s not embracing the innovation we’re bringing, as he wants to leave the (taxi) sector as it was 20 years ago,” the executive said.

The government last year passed a controversial bill aimed, as it said, to prevent the presence of “Uber-like” ride-sharing apps in the country, although the legislation is considered as a legal obstacle against other apps aimed at bringing together customer and professional driver without the need of a middleman.

The bill provides that companies managing mobile apps must sign three-year contracts with taxi owners, essentially negating one of the biggest features of such platforms and applications, namely, the ability of a customer to grade drivers and the service they hire.

Thousands of Greek commuters, especially in the greater Athens area, had increasingly come to rely on such apps, especially homegrown Taxibeat – now called Beat.

The Greek-designed application, as opposed to controversial Uber, relies only on professional taxi owners and registered drivers.